BP profits race 71% higher as oil prices rebound

BP has reported its best quarterly result for three years after notching up a 71% surge in profits thanks to surging oil prices.

The oil giant said underlying replacement cost profits jumped to 2.6 billion US dollars (£1.9 billion) for the first three months of 2018, up from 1.5 billion US dollars (£1.1 billion) a year earlier.

On a bottom-line basis, profits rose 70% to 2.4 billion US dollars (£1.7 billion).

BP said its upstream operations - which cover exploration and production - enjoyed the best quarter since the third quarter of 2014, with underlying profits more than doubling to 3.2 billion US dollars (£2.3 billion).

The company's production rose 6% in the first quarter compared with a year ago.

But the group continued to count the cost of its 2010 Deepwater Horizon tragedy in the Gulf of Mexico, with another 1.6 billion US dollars (£1.2 billion) forked out in the first quarter.

This included 1.2 billion US dollars (£873 million) for the final payment of its 2012 settlement with the Department of Justice.

During the quarter, BP completed another 200 million US dollars (£146 million) worth of divestments as it continues to sell off assets, and kept its guidance for between 2 billion US dollars (£1.5 billion) and 3 billion US dollars (£2.2 billion) over the full year.

Bob Dudley, group chief executive at BP, praised "another strong set of results".

He added: "Our safe and reliable operations and strong financial delivery have continued into 2018.

"Underlying profit was up 23% on the previous quarter and was our best quarterly result in three years."

The sector has been buoyed by rising oil prices, which hit nearly 76 US dollars a barrel on Monday.

Rival oil major Royal Dutch Shell last week reported a 42% rise in underlying quarterly profits to 5.3 billion US dollars (£3.8 billion).

BP's figures come after it last week named energy industry veteran Helge Lund as its next chairman, succeeding Carl-Henric Svanberg.

Mr Lund - who has previously headed BG Group and was a longstanding chief executive at Statoil - will join BP's board as chairman-designate and a
non-executive director on September 1 before taking on the role of chairman on January 1 next year.